Does anyone know how eligibility for the age pension is determined if you have a multiplex (3) and live in 1 and rent the other 2 out? The land area is less than 2ha and the value less than $1m so the assets should not be counted - is that right? Only the income. Based on my reading, bearing in mind there are no Financial officers at our local Centrelink to ask.
multiplex and eligibility for age pension
- Thread starter Tigger
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The form IA (income and assets) specifies the family home is exempt if it is on one title, less than 2ha and less than 1.2m$. However if parts of it are used for commercial or rental purposes (inc separate buildings) then you need to provide last year's tax return to prove income and that income is used in your income assessment.
You only need to complete Form R if you own more than one lot of land, or it is above 1.2m$, or it is bigger than 2ha. However if you do need to complete Form R then it asks lots of other questions eg why aren't you making $$ off it if there is no income, is it suited to subdivision, etc.
Deeming only seems to come into it if you have rentals on separate lots and then it is deemed at 2% of capital value on the first whatever and then I think 3.5% above that. I read up on deeming and it doesn't worry me.
I'm just wondering if I have it right - that if we had a multiplex and lived in one and rented the others, then it would only be the income from the others that is assessed while value of the buildings is ignored, provided it is one lot only, less than 2ha and less than 1.2m$. I thought someone here might know.
You only need to complete Form R if you own more than one lot of land, or it is above 1.2m$, or it is bigger than 2ha. However if you do need to complete Form R then it asks lots of other questions eg why aren't you making $$ off it if there is no income, is it suited to subdivision, etc.
Deeming only seems to come into it if you have rentals on separate lots and then it is deemed at 2% of capital value on the first whatever and then I think 3.5% above that. I read up on deeming and it doesn't worry me.
I'm just wondering if I have it right - that if we had a multiplex and lived in one and rented the others, then it would only be the income from the others that is assessed while value of the buildings is ignored, provided it is one lot only, less than 2ha and less than 1.2m$. I thought someone here might know.
Do you have links?
The value of a 'normal' family home is irrelevant to the assets test. Of course what you describe is not a 'normal' family home.
I've recently helped my folks apply for the pension, so I know a little, but am by no means an expert. In the situation you describe I can't find anything that states that the multiplex would be exempt from the assets test - just one third of it.
Also, if you're not happy with their decision (believe it's incorrect) then ask them to review it. I estimated that my folks would get around $200 pf. Centrelink came back with a few dollars pf. On review they'd made a mistake and I was correct.
The value of a 'normal' family home is irrelevant to the assets test. Of course what you describe is not a 'normal' family home.
I've recently helped my folks apply for the pension, so I know a little, but am by no means an expert. In the situation you describe I can't find anything that states that the multiplex would be exempt from the assets test - just one third of it.
Also, if you're not happy with their decision (believe it's incorrect) then ask them to review it. I estimated that my folks would get around $200 pf. Centrelink came back with a few dollars pf. On review they'd made a mistake and I was correct.
Hi Ed,
the only links I have are what I've found on the web, Forms IA and R. The mutiplex I refer to would be three detached homes on 1 amalgamated lot. It's not a 'normal situation' no. (I did write a long intro post yesterday giving lots of details and managed to lose it while trying to post, so didn't feel like rewriting it all again!)
We have 2 houses on 1 lot (PPOR and IP) and an adjoining lot with IP, and have long considered merging the 2 lots. I am 51 and not sure of job security, my husband is 66 and not eligible for any age pension, but he would like a health care card. In the course of those investigations we have become aware that it might be in our interests to go ahead with merging the 2 lots. But not about to spend $$ if we are not sure. Centrelink doesn't have a local Financial Advisor (off on stress leave) so we are trying to get info together to make a decision.
the only links I have are what I've found on the web, Forms IA and R. The mutiplex I refer to would be three detached homes on 1 amalgamated lot. It's not a 'normal situation' no. (I did write a long intro post yesterday giving lots of details and managed to lose it while trying to post, so didn't feel like rewriting it all again!)
We have 2 houses on 1 lot (PPOR and IP) and an adjoining lot with IP, and have long considered merging the 2 lots. I am 51 and not sure of job security, my husband is 66 and not eligible for any age pension, but he would like a health care card. In the course of those investigations we have become aware that it might be in our interests to go ahead with merging the 2 lots. But not about to spend $$ if we are not sure. Centrelink doesn't have a local Financial Advisor (off on stress leave) so we are trying to get info together to make a decision.
As far as I can tell, if your home is less than 2 ha, less than 1.2m$ and on one title, it is exempt from assets but any income derived (eg B&B, orchard, home business) is counted as income. Capital value of additional buildings isn't counted. However as we are at present, the home is exempt but the neighbouring IP would be included as an asset. Most of this land is flood prone anyway and not suited to subdivsion for houses.
We are entitled to arrange our affairs as long as we are not avoiding tax or obtaining benefits fraudulently. But can't find a Centrelink adviser to clarify. I have made an appt with our accountant but don't know if she knows much about this.
We are entitled to arrange our affairs as long as we are not avoiding tax or obtaining benefits fraudulently. But can't find a Centrelink adviser to clarify. I have made an appt with our accountant but don't know if she knows much about this.
No one's accusing you of anything dodgy.
Health care card - If you qualify for a part pension you'll get. You can also get it under low income (not asset tested) test. Which is not ridiculously low. http://www.humanservices.gov.au/customer/enablers/centrelink/low-income-health-care-card/income-test
Can you post the links that you found?
Hello Ed,
no I know you're not accusing us of doing anything dogy. I worked thru the process from Go to where I thought Whoa was and tried to get confirmation. In its absence I am working backwards, looking to see if I have taken a wrong turn anywhere.
Now I have struck a problem. One of the forms I found and printed yesterday has disappeared today! The name is still there but it looks different and addresses a different situation.
Anyway the real estate is covered by Mod R
http://www.humanservices.gov.au/spw/customer/forms/resources/modr-1401.pdf
Now all I have to do is find the correct form/s for what I have as ModIA, which is not the same as the ModIA that is available now.
no I know you're not accusing us of doing anything dogy. I worked thru the process from Go to where I thought Whoa was and tried to get confirmation. In its absence I am working backwards, looking to see if I have taken a wrong turn anywhere.
Now I have struck a problem. One of the forms I found and printed yesterday has disappeared today! The name is still there but it looks different and addresses a different situation.
Anyway the real estate is covered by Mod R
http://www.humanservices.gov.au/spw/customer/forms/resources/modr-1401.pdf
Now all I have to do is find the correct form/s for what I have as ModIA, which is not the same as the ModIA that is available now.
Income from real estate is specifically excluded from Mod I (income and investments) at Q21
http://www.humanservices.gov.au/spw/customer/forms/resources/modi-1310.pdf
Non PPOR real estate would be included under Q6 of Mod A (assets)
http://www.humanservices.gov.au/spw/customer/forms/resources/moda-1309en.pdf
Real estate income isn't included under Mod F (business details)
http://www.humanservices.gov.au/spw/customer/forms/resources/modf-1403en.pdf
http://www.humanservices.gov.au/spw/customer/forms/resources/modi-1310.pdf
Non PPOR real estate would be included under Q6 of Mod A (assets)
http://www.humanservices.gov.au/spw/customer/forms/resources/moda-1309en.pdf
Real estate income isn't included under Mod F (business details)
http://www.humanservices.gov.au/spw/customer/forms/resources/modf-1403en.pdf
Sorry Terry, I'm not sure what you mean by this: "whether the part of the main residence that is rented out is conisdered your main residnce for the purposes of the assets test"
I've worked through the forms and as far as I can tell, if the 3 houses are on one title which is less than 2ha in area (yes) and less than 1.2m$ (yes) then the capital value of the buildings being rented out is not assessed anywhere as 'assets'. The rental stream is assessed as 'income' of course.
By the time we are eligible for any benefits they will probably have changed the rules of course.
I've worked through the forms and as far as I can tell, if the 3 houses are on one title which is less than 2ha in area (yes) and less than 1.2m$ (yes) then the capital value of the buildings being rented out is not assessed anywhere as 'assets'. The rental stream is assessed as 'income' of course.
By the time we are eligible for any benefits they will probably have changed the rules of course.
The links you have provided in this, and subsequent posts are Centrelink forms for Centrelink to determine your eligibility for benefits when applying. They provide no information about the 'rules', they simply ask questions. They are of no benefit in planning to maximise your pension benefits.
Do you have any links (of the rules) for us to answer your question "Does anyone know how eligibility for the age pension is determined if you have a multiplex (3) and live in 1 and rent the other 2 out? The land area is less than 2ha and the value less than $1m"??
You've come to the conclusion that some of these assets might not be counted (for the assets test). On what basis?
I hope it wasn't second guessing the 'forms'.
Hello Ed,
no I have nothing else to go on other than those forms and some pages on the Centrelink website. That's what I've been looking for - some rules - but there seems to be none, only forms.
I've talked today to a private financial adviser who was recommended to me as being au fait with Centrelink benefits. That person went thru the forms with me and concluded that they would need to refer the question to Centrelink's Compex Case Unit for assessment.
The financial adviser is not sure but is of the opinion that what would happen is a valuer would be sent in by Centrelink to value the 2 IPs within the fenced yard (ie the leased areas) and those values would be included as assets. That's fair enough and we would be happy with that, but of course we will now have to wait til the CC Unit gets back with a decision.
We're not going to be eligible for the age pension but my husband will be able to get the Commonwealth Seniors Health Care Card so he is happy with that. I'll post back here when I get an answer from the Centrelink CCU.
no I have nothing else to go on other than those forms and some pages on the Centrelink website. That's what I've been looking for - some rules - but there seems to be none, only forms.
I've talked today to a private financial adviser who was recommended to me as being au fait with Centrelink benefits. That person went thru the forms with me and concluded that they would need to refer the question to Centrelink's Compex Case Unit for assessment.
The financial adviser is not sure but is of the opinion that what would happen is a valuer would be sent in by Centrelink to value the 2 IPs within the fenced yard (ie the leased areas) and those values would be included as assets. That's fair enough and we would be happy with that, but of course we will now have to wait til the CC Unit gets back with a decision.
We're not going to be eligible for the age pension but my husband will be able to get the Commonwealth Seniors Health Care Card so he is happy with that. I'll post back here when I get an answer from the Centrelink CCU.
The rules for this are found in the Social Security Act
http://www.austlii.edu.au/au/legis/cth/consol_act/ssa1991186/
http://www.austlii.edu.au/au/legis/cth/consol_act/ssa1991186/
